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Political constraints and concern production gains at shale fields aren’t sustainable will hinder the development of liquefied natural gas export plants in the U.S., former Exxon Mobil Corp. (XOM) chief Lee Raymond said.

“There is going to be a big debate in the U.S. as to whether or not they’re going to permit the export of liquefied natural gas,” Raymond said in an interview in Oslo yesterday. “Even if you get past the politics, you have to test whether or not the resource base is sufficient.”

New techniques to access the natural gas trapped in shale rocks, including the use of hydraulic fracturing and horizontal drilling, have transformed the U.S. into the world’s largest gas producer. Estimates suggest fields in Pennsylvania, Ohio and Texas may contain as much as 862 trillion cubic feet of the fuel, enough to supply the U.S. for over thirty years at current consumption.

Politicians including Democrats Senator Ron Wyden of Oregon and Representative Edward Markey of Massachusetts have said exports may raise domestic gas prices. In allowing exports, the U.S. may be “trading away the enormous economic advantage of having large, low-cost domestic natural gas supply,” Wyden said in an e-mailed statement on Jan. 6. “It’s going to be a little while before people are really confident that there is going to be a sufficient amount of gas for 30 years to support the construction of an LNG plant,” said Raymond, who stepped down in 2005. “I’m frankly not sure that we have enough experience with shale gas to make the kind of judgment you’d have to make.”

Global Supply

Some gas-industry players are confident the U.S. will become a major exporter. BG Group Plc (BG/) said yesterday that the U.S. will be able to supply about 9 percent of global liquefied natural-gas output by the end of the decade. The U.K.’s third- largest gas producer said the U.S. will have the capacity to export about 45 metric million tons of LNG a year from 2020.

Rising production of natural gas has driven down prices and is leading owners of import terminals to explore exports. Cheniere Energy Inc. has proposed a liquefaction facility at its Sabine Pass terminal, which would be the first new North American export project since 1969. BG has a preliminary agreement to take gas from Sabine Pass.

The cost of building an LNG (LNG) terminal runs to billions of dollars. Cheniere’s Sabine Pass terminal will have a capacity of 9 million tons a year. Construction costs at projects underway in Australia, have reached $4,000 a ton of capacity, according to analysts at Sanford C. Bernstein & Co.

‘Huge Investments’

“If you build any LNG, from a producer’s point of view, you can only do that from an economic point of view if you’re assured that you have a long-term competitive supply because these are huge investments,” Raymond said.

Exxon, the world’s largest energy company by market value, is pursuing shale exploration in Argentina, Poland and the U.S. The company said earlier this month that two exploratory wells drilled in a Polish shale formation last year weren’t commercially viable. The gas discovered failed to flow in sufficient quantities Texas-based Exxon said Feb. 1.

“There’s lots of shale around the world, but just because it has the name shale on it doesn’t mean it’s something that would be economic to try to develop by the technique being used largely in the U.S.,” Raymond said.

Production of shale gas in China would be a “real game changer,” the former executive added. “China is run by engineers, it’s not run by politicians.”

“They’re technically competent and they approach things in the same way a good engineering group at a major oil company would approach things,” he said.

Exxon Mobil Corp. (XOM)’s failed shale-gas wells in Poland may hobble the nation’s effort to become one of the world’s major energy sources and dismantle Russian dominance of Eastern European natural-gas markets.

Exxon, the world’s largest energy company by market value, said two exploratory wells drilled in a Polish shale formation last year weren’t commercially viable. The gas discovered in the wells, Exxon’s first in Poland, failed to flow in sufficient quantities to justify bringing them into production, David Rosenthal, vice president for investor relations, said during a conference call yesterday.

International energy prospectors, including Marathon Oil Corp. (MRO), Chevron Corp. (CVX) and Talisman Energy Inc. (TLM), are probing Poland’s shale deposits to see if drilling techniques that revolutionized U.S. gas production can unleash reserves big enough to supply Polish demand for more than three centuries. Exxon’s setbacks suggest Poland’s shale poses unique challenges that may increase costs and delay output, said Gianna Bern, founder of Brookshire Advisory & Research in Chicago.

“Shale exploration is a very high-cost and high-risk business and the Polish shale market is still in its infancy,” Bern, who advises major oil companies on risk management and strategy, said in a telephone interview yesterday. “It’s early in the game for Poland, and they have significant potential reserves over there.”

Reduce Imports

Poland’s shale formations hold 187 trillion cubic feet of recoverable gas, according to an April 2011 assessment by the U.S. Energy Department. Those resources are 32 times larger than the country’s conventional gas reserves and enough to supply domestic consumption for 322 years.

For Poland, successfully unlocking gas from shale would be a boon to domestic manufacturers and power producers by diminishing the need for Russian imports that now supply two- thirds of demand, said Benjamin Schlesinger, president of Benjamin Schlesinger and Associates Inc., a Bethesda, Maryland- based adviser to gas producers, utilities, regulators and financial-services firms.

Poor Wells

“Poland’s shale resources are enormous,” said Schlesinger, a Stanford University-trained engineer who helped the New York Mercantile Exchange design its gas futures contract. “Poland should be able to capture a good deal of those resources and reduce reliance on the Russian Federation.”

Gazprom’s depositary receipts rose 2.5 percent to $12.40, the highest closing price since Oct. 28. The London-listed receipts each are worth two ordinary shares in the Moscow-based company.

Exxon’s failures followed disappointing results at Polish wells drilled last year by 3Legs Resources Plc and BNK Petroleum Inc. (BKX) London-based 3Legs’s Lebien well and BNK’s Lebork well flowed at lower rates than similar prospects in the Barnett and Fayetteville shale regions in the U.S., Sanford C. Bernstein & Co. said in a Nov. 10 note to clients.

“Poland is cited among Europe’s best shale prospects, but Exxon’s result supports our caution on achieving material near- term volumes,” Oswald Clint, a London-based analyst at Bernstein, said in a note today.

Even so, it may be too early to draw any firm conclusions from Exxon’s drilling failure, said Pawel Poprawa, who specializes in shale at the Polish Geological Institute in Warsaw.

‘Technological Problem’

“If we look at the experience from the U.S. or Canada, no single well can provide the answer if the basin has potential or not,” he said. “Low flows seem to be a technological problem.”

Marathon Oil said today that it’s evaluating data after finishing its first well in a Polish shale formation. The Houston-based company said in a statement that it intends to drill three more wells during the next few months and withdraw rock samples for testing. Marathon plans a total of six to seven Polish shale wells this year, according to the release.

The Polish shale results come after Exxon encountered a dry hole in Hungary in late 2009 drilled in a tight-sand deposit similar to shale. Exxon walked away from the $75 million project after striking more water than gas.

Exxon and other major North American energy producers have been lured to explore shale prospects from Germany to Argentina after largely missing out on the boom in shale extraction in the U.S. that began in the middle of the last decade.

Shale formations were ignored by much of the energy industry for most of the past century because the rocks were considered too hard to crack using traditional drilling techniques. That began to change in the late 1990s with the development of new horizontal drilling practices and more- intensive hydraulic fracturing that succeeded in unlocking gas and crude from shale and similarly dense geologic deposits.

‘Attractive Fiscal Terms’

Exxon sought to jump-start its shale program in June 2010 with the $34.9 billion acquisition of XTO Energy, a Fort Worth, Texas-based pioneer of shale development. In addition to shale wells and undrilled prospects that stretch from the Mexican border to Canada, Exxon wanted to transfer XTO’s in-house expertise to foreign shale fields.

Exxon hasn’t disclosed its plans for further drilling in Poland. The shares rose 0.3 percent to $83.97 at the close in New York.

Poland has led European shale exploration by virtue of its tempting geology and by offering “attractive fiscal terms” to prospectors, the Energy Department in Washington said in a September report.

Still, a “likely aggressive tax burden” to be imposed on shale-gas producers may damp investor enthusiasm, analysts at Bank Zachodni WBK SA, based in Wroclaw, Poland, said yesterday in a note to clients.

Polish drilling also has been hindered by a scarcity of rigs, water and specialized equipment needed for shale wells, Bern said.

“Getting the things you need to drill these wells is much more difficult in Poland than in the United States, where the shale industry is very well-developed,” Bern said.

CAMAC Energy Inc. has finished completion operations on the Oyo-8 well, located offshore Nigeria, and is now ready to start oil production. Oyo-8 is hooked up to the Bumi Armada-owned FPSO Armada Perdana. However, CAMAC has been informed by Bumi that the FPSO is not ready to receive oil production from the well due to […]

UK-based offshore drilling contractor Ensco has from oil company BP received a notice of early termination for ENSCO DS-4, a drilling rig operating in the U.S. Gulf of Mexico. The estimated effective date of the contract termination is July 2015 based on the projected completion of the customer’s current well program. Under the terms of […]

Chevron Corporation has confirmed today that George L. Kirkland, vice chairman and executive vice president, Upstream, will retire from the company, effective June 15. He will be succeeded by James W. (Jay) Johnson, as executive vice president, Upstream, effective June 16. “George’s business acumen and deep operational knowledge of our industry have helped c […]

Italian oil and gas company Eni, following its participation in the competitive International Bid Round launched by the Republic of the Union of Myanmar, signed two Production Sharing Contracts (PSC) for offshore blocks MD-02 and MD-04. The contracts were signed in Nay Pyi Taw, in the presence of the country’s Energy Minister. The Joint Venture […]

Azonto Petroleum has said that its board is going through a review of “a range of strategic options for the Company to preserve shareholder value and reduce operating costs.” In a statement issued today, the oil & gas company focused on West Africa, said that it is contemplating a sale of its assets and/or a sale […]

Maersk Oil has informed that production has started from the new unmanned platform Tyra Southeast-B, located in the Danish North Sea. According to Maersk, the platform is expected to add reserves of 50 million barrels of oil equivalent (BOE) over the next 30 years to Danish production. “The Tyra Southeast extension is a great example […]

MacGregor has appointed Høye G. Høyesen (49) as Vice President, Offshore Mooring and Loading Division starting as of April 1, 2015. MacGregor reorganised into seven operative divisions in the beginning of 2015 to improve customer focus. Offshore Mooring and Loading Division drives the development of Systems and Equipment for Offshore Floating Units. Høyesen […]

Wood Group has been awarded a five year, multi-million contract by Total, which includes the option for two, one year extensions. Under the contract Wood Group PSN (WGPSN) will deliver engineering, procurement, construction and commissioning services to four offshore assets and two onshore facilities in the UK continental shelf (UKCS). The contract, effectiv […]

VAALCO Energy, Inc. has announced that the post-salt Kindele-1 well, its first exploration well on Block 5 offshore Angola, was drilled to a total vertical depth of approximately 1,829 meters. VAALCO started drilling Kindele-1 well on March 2, 2015 with Celtic Sea semi-submersible drilling rig. According to the company, the objective reservoir, the Mucanzo […]

MacArtney Group will launch the new NEXUS MK VII multiplexer at the Ocean Business exhibition. Also MacArtney will display other developments, such as the LUXUS wide angle LED, and stand visitors... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

After reorganization into seven operative divisions in the beginning of 2015, MacGregor has appointed Høye G. Høyesen (49) as Vice President, Offshore Mooring and Loading Division starting 1st of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

On behalf of the French Defence Procurement Agency (DGA) in France and UK MOD’s Defence Equipment & Support organisation, OCCAR has awarded the Maritime Mine Counter Measures (MMCM) contract to... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

BW Offshore, a provider of floating production services to the oil and gas industry, has received a notice of termination for the FPSO BW Athena contract from Ithaca Energy. Namely, BW Offshore and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Cameron announced that Justin Rounce has assumed the newly created position of Vice President, Marketing and Chief Technology Officer (CTO), effective March 23, 2015. In his new role Rounce is... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Subsea 7 has declared their option to extend the contract for the construction vessel (CSV) “Normand Seven” with 1 year from September 2015. This is the first of a total of five yearly... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Mariners are advised that over the Easter weekend (4th-5th April 2015) the vessel Stril Explorer is due to arrive at the Gwynt y Môr windfarm to remove the 3 FLIDAR moorings on the seabed. The 76.4... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Baker Consultants Marine Limited has been appointed by GeoSea to provide underwater noise and marine mammal monitoring and mitigation during the construction phase of the Gode Wind 1 and 2 offshore... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

The ship Chioggia and the Operational Divers Group (GOS) from the Comsubin performed the mine clearing operations in the Mediterranean Sea. The GOS, with a sophisticated equipment on board, plumbed... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Lancashire based EDS is marking the completion of a £10 million contract for cable termination work at the world’s second largest operating offshore wind farm, with an exemplary health and safety... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Statoil’s active leases in the Gulf of Mexico

Most people who get new jobs aren't even looking new jobs. That's according a new research paper by Carlos Carrillo-Tudela, Bart Hobijn, Patryk Perkowski, and Ludo Visschers, published by the San Francisco Fed. The results of their study show that "more than three-quarters of workers who switched employers did not report active job search in t […]

Facebook dropped $19 billion on WhatsApp, Snapchat is valued at $15 billion, and even the anonymous messaging app Yik Yak, despite being a little over a year old, is already valued between $300 million and $400 million. Messaging apps are big business, and here’s why. Based on new data from mobile analytics firm Flurry charted for us by BI Intelligence, mess […]

If you didn't have enough reasons to see the next "Avengers" movie, here's one more: the second trailer for "Star Wars: Episode VII" will play in front of the anticipated sequel. Both /film and Collider are reporting the second trailer for "Star Wars: The Force Awakens" will be attached to the "Avengers: Age of Ul […]

Come join our team! We're looking for an Assistant Managing Editor to help build and manage our fast-growing newsroom. This person should have some experience recruiting, and has preferably worked in journalism as a reporter or editor and is looking for a new and expanded role. The ideal candidate is: -Obsessed with staying organized and loves juggling […]

The contract between "Big Five" book publisher HarperCollins and Amazon is about to expire and HarperCollins is refusing to sign an agreement with the new terms that Amazon is asking, a source with knowledge of the situation tells Business Insider. The contract presented to HarperCollins was the same contract recently signed by Simon & Schuste […]

The peril of not being ready to appear in major stores is a problem KIND knows all about. Around 2007, one Wal-Mart buyer gave us a chance. She was a KIND consumer herself and believed in our brand. She wanted us to succeed. Wal-Mart is a prize account for consumer brands, but it’s a challenging customer for a fledgling start-up to have, because it has world […]

Ever stared up at the sky on a clear night and felt suddenly small beneath the stars? Hiked up a mountain and marveled at the immensity of the vast beauty below? That inexplicable sense of wonder, it turns out, is actually good for you. A handful of recent studies have found that when people experience a sense of awe, they're generally more likely to fe […]

Turin (Italy) (AFP) - Tottenham winger Andros Townsend came off the bench to steal the limelight from club-mate Harry Kane with a late leveller in a 1-1 draw against Italy in Turin on Tuesday.England manager Roy Hodgson was forced to hand Spurs sensation Kane his full debut alongside Wayne Rooney due to injuries to both Daniel Sturridge and Danny Welbeck.But […]

Jameis Winston, the presumed No. 1 pick in the upcoming NFL Draft, held his Pro Day in front of NFL scouts on Tuesday. The initial reaction from many was that it could have gone better. Todd McShay of ESPN said he was "underwhelmed" by Winston's performance, which included 102 passes. Charles Robinson of Yahoo! Sports called it an "OK per […]

It would appear de-dollarization among America's "allies" is accelerating... As of 6 p.m. Tuesday, a total of 46 countries had applied to be founding members of #AIIB. Founding membership will be finalized on April 15 — People's Daily,China (@PDChina) March 31, 2015 Most of the 46 nations are here... And while Washington has proclaimed […]

Shortly after the US equity mnarkets closed, headlines crossed from Switzerland seemingly confirming "no deal" with Iran...P5+1 MINISTERS PLAN TO LEAVE LAUSANNE IN MORNING but that was quickly watered down with a warning that Iran has until dawn to agree to the deal. This sent WTI up modestly and then API Crude inventories, which were expected to r […]

If you love Trannies, here's a message for you this quarter... First let's get this out of the way... What an utter farce today was with markets breaking everywhere to stick save VIX ETFs rampant manipulation of the indices... After open, @NASDAQ stopped quoting in A-Z for between 6-8 minutes. Here is in $AAPL: between 09:31-09:37 ET pic.twitter.co […]

1987 Or 2015? "They are not real buyers and sellers... these are computers that drive the markets down extremely fast..." "A crash is coming..." "A correction will prompt rate cuts which will ensure The Bull Market is not over..." * * * It's never different this time... The Friday night before Black Monday 1987... […]

Two months ago, when looking at the most recent physical gold withdrawal numbers reported by the Fed, we observed something peculiar: between the publicly reported surprise redemption by the Netherlands (122 tons) and the just as surprise redemption by the Bundesbank (85 tons), at least 207 tons of gold should have vacated the NY Fed's gold vault. Inste […]

Stranger things have happened... Remember the stop-on-a-dime 666 lows of the S&P... Well it's been 7.5 years again... and we have extended an almost-perfect Fibonnaci 61.8% off the last high-to-low swing... Charts: Bloomberg h/t Brad Wishak

With Decisive Storm airstrikes showing no signs of abating, and with some reports suggesting that as many as 40 people were killed when bombs struck a refugee camp near Haradh, many suspect the violence in Yemen is set to escalate meaningfully in the days and weeks ahead with Saudi Arabia preparing to launch a ground invasion in the expanding effort to debil […]

Days after Zero Hedge broke the news that CNBC had just suffered its worst ever ratings year in 2014... ... we weren't at all surprised to read in the WSJ that "CNBC will no longer rely on TV ratings specialist Nielsen to measure its daytime audience, beginning later this year. Instead, it has retained marketing and research firm Cogent Reports f […]

......Submitted and posted with permission by Gary Christenson - The Deviant Investor (Independently Written) Which silver? Paper silver or real silver? Silver prices are largely set on the COMEX futures – paper silver. A company can post the margin and sell short thousands of contracts with no actual metal available thereby creating artificial supply. […]

It is important to keep track of the war on terror and its damages. A big war creates immense antipathy among those subject to its destruction ... Trade suffers; blowback occurs. And for the US, such a war can be economically draining far beyond what is now being reported. This is not really taken into account in the economic analyses purveyed across the air […]

A big mainstream media meme is that when economic conditions worsen, people respond by seeking out Hitler-esque leaders who will express the frustration of the "people" via genocide, incipient warfare and the creation of a police state. Regardless of whether this has been true in the past, we have long predicted that the Internet would change the w […]

Discrimination has become a "dirty word." It has come to carry the "politically incorrect" connotation of prejudice, hatefulness, racism, and cruel intolerance towards others in society. There is only one problem: Which one of us does not discriminate? Indeed, everything we do reflects discriminating choices and decisions. The issue of di […]

Predictably, the death of Lee Kuan Yew has generated many positive comments in the mainstream media about his "leadership" of Singapore. The main thrust of the comments has to do with his ability to run an authoritarian regime that produced a kind of capitalist prosperity. This is an all-too-familiar meme, one often voiced by Western leaders. The i […]

Leaders in high places around the world are making it clear that the drug war is in a sense "over" – and all that is left to do is wind it down. Of course, if you ask the millions who have suffered from the drug war and their families, the "war" is an all-too-literal presence. For them, there is no winding down, or not yet. But Kofi Anan […]